Legal Question in Wills and Trusts in Texas

It depends on the terms of the settlement of the suit, and whether or not the settlement indicated any sort of a breakdown for the settlement he received. Money that your husband received for things like lost wages is community property, while money that your husband received for things like emotional distress or pain and suffering would be considered his separate property. When that money is characterized and then used to purchase another asset, tracing that asset back to its original characterization is pretty easy.

However, your issue is quite complicated. You were married when he died. We have a presumption in Texas that all property on hand at the end of a marriage is community property, until someone proves that it isn't. So, we begin with the presumption that the new house (which I assume you never lived in) is community property. This means you're entitled to 1/2, while your husband's children share the other 1/2. You can bet, however, that the children will likely attempt to prove that at least part (if not all) of the settlement proceeds (and thus the new house) were separate property. If they successfully establish this, then you'd be entitled only to a life estate in 1/3 of the property.

The issue would be best resolved by retaining a probate attorney to protect your interests. Further down the road, rather than litigate all of these issues (which could easily get expensive) it would serve everyone to reach an agreement to swap interests for reasonable values so that everyone can walk away somewhat satisfied.